Dana Point wants $1.9 million from pot shop

February 24, 2011

For the first time in the almost 18 months Dana Point has been battling marijuana dispensaries it claims are operating illegally in the courts, a monetary judgment is rearing its head.

The City of Dana Point plans to ask a judge to force The Point Alternative Care to fork over $1.9 million. On Thursday Orange County Superior Court Judge Jamoa Moberly declared the city won a nuisance lawsuit it filed against the dispensary last year.

The ruling gives the city the opportunity to go after civil damages and makes it clear that the dispensary cannot re-open.

The city is still fighting nuisance lawsuits against two other medical marijuana dispensaries, Beach Cities Collective and Holistic Health. All three dispensaries were shut down by the city earlier this month because of a variety of code violations.

City Attorney Patrick Munoz said the court allows for a $2,500 judgment for every day an illegal business operated in a city. In Point Alternative's case, that's $1.9 million. Whether the city will actually collect the money from the dispensary's owner, Kathy Lynn Ray, remains to be seen. More hearings must be scheduled for a judge to review the city's request.

Multiple calls and e-mails to the dispensary's attorney, Lee Petros, were not returned. The dispensary has the option of appealing the judge's decision.

FOR-PROFIT BUSINESS?

"This case (and all the cases) are not an attack on the right to use marijuana for medical purposes as set forth in Proposition 215. Rather the city won this case, and is pursuing the other cases, on the basis that the dispensaries are for-profit businesses, illegally engaged in the sale of marijuana for non-medical purposes -- and merely claim they are medical providers," Munoz wrote in an e-mail.

Proposition 215, a 1996 California-wide voter initiative allows patients with a doctor's recommendation to use marijuana. Sales of medical marijuana are not permitted under the law, but another legislative statue from 2004 called SB420 allows nonprofit collectives to distribute marijuana.

The city's fight against the dispensaries has been stalled by a variety of side cases involving medical privacy issues and one woman's lawsuit against the city for cutting off her access to medical marijuana. One side issue brought the case to the California Supreme Court.

At one point at least six dispensaries were operating in the small beach town. That number has been whittled down to three over the past two years.

OTHER LEGAL TANGLES

Separate from Moberly's decision, another Superior Court Judge, William Monroe, filed a tentative ruling denying the city's motion for a summary judgment (which means no trial) for Beach Cities because he believed some facts were not in order. Monroe is scheduled to finalize his ruling Monday. If Monroe denies the city its request, a trial has been scheduled for April 4. A third judge's ruling on Holistic Health scheduled for Friday was postponed to next week.

Munoz said Moberly's decision should not affect the other judges as they are separate cases.

Kris Hermes, spokesman for Americans for Safe Access, a medical marijuana advocacy group, said the city's call for $1.9 million is a scare tactic.

"I don't know what financial burden other than attorney's fees the dispensary placed on the city and I'm sure those fees are not in the realm of $1.9 million. It's a form of intimidation," Hermes said.